(Mar. 1, 2010) Under the association agreement signed by the European Union and Israel, products made in Israel and imported into the European Union qualify for preferential treatment. In 2009, Israeli exports to the EU amounted to €8.8 billion (about US$11.8 billion). On February 25, 2010, the Court of the European Union issued a judgment that holds that Israel cannot present as its own products items made by settlers in occupied territory in order for the products to be eligible for reduced customs duty.
The case involved the German company Brita, a maker of soft drinks, which purchased syrup from an Israeli company located in the West Bank. Based on documents presented by Israeli authorities, the products qualified for a lower duty payment because they were made in Israel. The Court stated, “[p]roducts obtained in locations which have been placed under Israeli administration since 1967 do not qualify for the preferential treatment provided for under that [EU-Israel] agreement.” (Andrew Rettman, EU Court Strikes Blow Against Israeli Settlers, EUOBSERVER, Feb. 25, 2010, available at http://euobserver.com/9/29558/?rk=1.)
The European Commission noted that exports from the settlement areas account only for 0.87% of the total trade volume, and typically they are labeled accurately. (Id.)